Building Companies That Are Both Good & Valuable, with David Odmark

David Odmark is the Co-Founder and CTO of Greenlight Guru, a quality management software platform designed for medical devices companies that has undergone a ton of growth in the past year. Today, David oversees an engineering team of about 20, and is planning on ramping up hiring in the year to come.

In this episode, we discuss the difference between being a valuable company and being a good company, how quality systems can help us move faster, and whether or not there’s truly an answer for work/life balance.

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Full Transcript:

Wes Winham:David, thank you so much for joining us today on Scaling Software Teams.

David Odmark:You're very welcome, it's my pleasure.

Wes Winham:What is the most important inflection point in your career that's gotten you to where you are today?

David Odmark:I've actually been really fortunate that I've had multiple inflection points. I guess though, the most important one was probably the first one that got me into tech. If we travel back in time to 1991, I was a PhD candidate in philosophy at the Ohio State University. I went into it thinking I wanted to teach, and I was doing really well academically, I loved the discipline, but had really kind of fallen out of love of the vocation of being a professional philosopher. Long story short, I decided to get married and do a shift in career. Unfortunately, I didn't really know what I was shifting to, and the classic joke is none of the big philosophy shops were hiring at the time, so I had to sort of reinvent myself.

Fast forward about a year and a half and at this point, I had fallen in love with computers, which was something that I was very barely dabbling really before then. My wife had one of those old original Mac Classics, and it had HyperCard, which those old farts like me remember as sort of a proto-programming environment for non-programmers. Over the course of that year or so, I just kind of got almost obsessed with it and at that point decided, "Hey, yeah, here's what I want to do with my life."

Unfortunately, I didn't, and I think there's a lot of folks out there who are in a similar boat, didn't see a path. I didn't see a clear path. I had zero credibility or credentials in the space and didn't know what to do. So at the time I was working actually as an operations manager for a temporary service, which was fortunate because it gave me access to a lot of the best companies here in Indianapolis at the time, one of which was a company called Master Software, which back in the '90s actually, they invented a really cool way to do fundraising campaigns, first on the old Data Gen and then eventually on the original PC.

I realized at the time, the inflection point was sort of learning that it's not so much about finding the ideal situation for exactly where you are relative to where you want to be, but putting yourself into a position where you can reasonably expect opportunities are going to come up. I figured, "Well, I have no credibility as a software developer, but if I get myself hired at a software company, there seems to be something there," even if I didn't know exactly what it was. So, they were hiring for customer support representatives. They loved educators. They didn't want technical customer support representatives because their customers weren't technical. They were looking for people like with education background, which I had, and teaching background, which I had.

So that was the inflection point, once I was ensconced as a support person, I was able quickly to, while I was teaching myself coding to kind of get myself more ensconced in the development side and looking around and finding things that needed to be doing. Often they were the things that nobody wanted to do, but it gained a lot of good will and credibility, and over time I got more and more opportunity and to the point where I had enough technical skill that I was moved over to the development department full time. That was sort of the whole start of my journey. So, 26 or 7 years later, here we are.

Wes Winham:Up through the customer support department, that's awesome.

So, before we started recording, you recommended the book Bad Blood, the book about Theranos. Can you summarize that book for us and I'd love to hear your takeaways.

David Odmark:Yeah, yeah. There've been several documentaries and books and articles written on this. It's a somewhat famous case study where-

Wes Winham:It's exciting.

David Odmark:It really is. It's fascinating in a number of ways. They're a unicorn company from the Valley called Theranos who claimed to have invented a revolutionary way to measure, to do all sorts of diagnostic tests on a very small amount of blood, so rather than having to take five vials of blood, they can do a finger prick similar to a glucose test and insert it into their magic machine and out would come massive diagnostic information. They lasted for several years.

Funny little story, when Greenlight started, way back in 2014 when we were looking for early adopters, before we even had a product, Theranos reached out to us for their quality system. It never went anywhere, and I often wonder what the world would have looked like if they were using Greenlight, maybe they would have had a better time, but probably not. But anyway, long story short, it turns out that the whole thing was based on flat-out fraud and lies. They had not invented the machine, and instead, they got more and more creative about faking demos and raising money based on promises and outright intimidation of people who learned the truth. And just, it was a runaway train until the inevitable happened and they crashed, and now lots of lawsuits and indictments and shedding of tears and [inaudible 00:06:38] of beards and all that. It really is, it's kind of a part object lesson true crime story and just fascinating study on what, in my mind, sort of how a lie can take root and just build to the point where you can't stop it.

Wes Winham:So, as someone who works in the quality regulatory environment, is Theranos an indictment of the controls that we have, or is it the controls working as intended?

David Odmark:I think it's a little of both. I think that everybody in the quality regulatory industry, in this type of regulation, have to step back and look and say, "Okay, how could this have happened?"

Obviously, there were controls that were circumvented. In some ways, though, it's an example that the system actually worked as intended, but because before they were ever truly approved, the fraud was discovered, but one of the nice trends that we see ... Just to be clear, the type of regulatory environment that we work with is typically the FDA, because we market exclusively to medical devices, so they're under the purview of the FDA here in the United States, and in Europe, very similar ISO organizations as regulatory bodies, but they mostly harmonize together and work the same way.

Especially here in the United States, the FDA had already been trying to sort of push the idea of quality and regulatory as less of a check box activity and more of a getting back to the roots of what quality really means, which is ultimately reducing harm. They knew that historically acting as mostly a policing organization was not effective, because that sort of encourages the other behavior of trying to avoid the police, rather than trying to work with the FDA to ensure quality. That is something that we are very much in line and working with the FDA on, so it's really, it's big, huge events like Theranos, embarrassing though they be, are really useful because it kind of gives a gut check on, "Yeah, there's something really wrong," and the approach that we're headed towards really is much, much better.

Wes Winham:More and more start-ups are, I think I've heard the term, full stack start-ups. It's not just software, they're actually touching the rest of the world. You know, Uber, Airbnb, whether it's HIPAA, we're all subject to GDPR. As we increasingly as software engineers interact with these regulatory agencies, what lessons should we learn from something like Theranos, other than don't commit fraud? I think that's a pretty good lesson.

David Odmark:Right. One of the many fascinating things about that story is that nobody can really tell whether Elizabeth Holmes, the main perpetrator and the inventor and CEO, no one can really tell whether she actually believed what she was saying or whether it was just outright fraud. The fact is that, it's really hard when you're that passionate about your mission to kind of talk yourself into thinking, "Eh, maybe if I just cut this one corner here then I'll be able to make up for it." Most people agree that she really believed that she, if not hadn't invented this, that the smart people were just this close and they weren't going to be able to invent it and it just never happened.

I think one lesson is ... There's a concept that I like to kind of apply, I've been thinking a lot about it. I use the word integrity to sort of describe it, but I don't mean just like typical ethical and moral integrity, I mean it as an overall concept of doing things, of guidelines of how to live your life. That concept is do the right thing, but also in the right way and for the right reasons. Much like being healthy is a combination of diet and exercise and sleep, I think integrity is a combination of those three things. It's so easy, especially if you're convinced of your good intentions and you're thinking that you're doing the right thing, to kind of willing to compromise on some of the other ones. So you'll do the right thing, but maybe not quite in the right way, or for the right reasons. But I believe strongly in the longer ... The older I get and the more experience I accumulate, that I'm just convinced that the right way to do it is not compromise on any three of those areas.

Theranos is kind of a, really the extreme example of what happens when what you do is not done with integrity in that fashion. It's something that I'm very proud of Greenlight, because that is something that we're really trying to do here. Another way of looking at the same thing is, I think that there's a big distinction between a valuable company and a good company. Again, I'm very proud that Greenlight is trying to be both. So many companies, we all could name dozens of examples without even thinking about it, are concerned and sometimes pull off being a valuable company, at least for a short period of time, but they leave the good part behind.

Wes Winham:I want to get into that, but first I want to make sure I understood your three points. It's do the right thing, in the right way, for the right reasons.

David Odmark:Correct.

Wes Winham:If I wanted to steel man Elizabeth Holmes, give her the benefit of the doubt. Maybe she was, maybe the right thing was to build this device. I think the benefits you claim are real, if I really could build this thing, it would benefit humanity. Maybe even for the right reasons was correct, maybe she really did believe what she was saying about the potential benefits, but maybe ... Was it in the right way? Is that where you think she fell down?

David Odmark:And that's where she failed rather spectacularly, which is, did not actually build a quality system, and then trust the results, and then only proceed once the safety net was strong enough. That's the way I tend to think of quality systems in our space. Sometimes I picture our companies as aspiring acrobats, and they grow up their entire lives and all they dream of is being the world's greatest acrobat. They're going to fly high and do amazing things, but before you do that, you have to build a net. You have to have a net in place. Otherwise, you can't really learn how to do the dangerous maneuvers, because if you fail, you die.

So building a net is not what you get into this for. Nobody really starts a company because they're just dying to build a world-class quality system. There's a couple ways you can look at it. You can look at it like, I'm going to build the minimal quality system so that I can get past this to the thing I really want to do, or you can look at it as, I'm going to build a quality system that gives me the confidence and the faith that I am causing no harm, that my processes are repeatable, that everything that we're doing is not ... Doesn't just, that it works, but that I can show that it works. I've left enough evidence behind so that an independent third party could look and audit and say, "Yep, yep, that's it. Okay, you're good."

So you have to put as much enthusiasm into building that, but then once you do, it's an enabler of the acrobatics that you really want to do. So that's the part that Theranos, they weren't even slightly interested in how they went about doing this. And of course, there's the money thing too. That's-

Wes Winham:That tends to skew motives.

David Odmark:If nothing else, the way that ... Yeah, and the way that we need to examine how companies are funded. There's a lot of lessons to be learned there too.

Wes Winham:I love that net analogy. It's kind of making me think of, why do we build continuous integration and continuous delivery systems that give us confidence? We build that net so that we can experiment, and when it comes to software and technology that can impact people's lives, we need even more than that. We need the net to make sure we're not going to harm people.

David Odmark:Yes. Anyone who's ever worked at a company that has a truly first-class QA and testing organization, and also worked for companies that have been not quite as mature, understand just how much more calming and relaxing it is to work when you have that kind of quality net. You end up being a much better developer. Ironically, it lets you get closer to the Silicon Valley idea of move fast and break things, because you have the confidence that when things break, it's not going to get through and end up harming someone. It lets you do much better, faster iterations. It actually gets, like in our case, our companies use Greenlight to get to market faster the more that they invest in their quality system.

Which, another lesson is, don't try to do it as cheaply and as quickly as possible. You should be wanting to invest in your quality system and looking at that as a true investment, that your investment will be repaid in multiples.

Wes Winham:Faster innovation, less risk, that makes sense. I'd love to have this conversation and then move in right on the edge on venture capital and Theranos and what kind of lessons we should learn as an industry about fundraising and what that means.

David Odmark:Sure. I think mostly, when you read the book and watch the documentaries, what really jumps out is how they were able to raise so much money. In part, it's how much of the traditional capital establishment is built on reputation. And again, kind of to go back to the distinction I made between a good company and a valuable company, it's too easy for the people with the money to build a reputation building valuable companies where that's measured by how much money they made their investors, and not good companies.

She was able, through her own contacts and her own privilege, to build an initial list of really impressive people who were completely disengaged but had great reputations, but not necessarily reputations for building good companies, but they did have reputations for building valuable companies and that was enough to continue to pile on and pile on. This is not universally true, and in my experience, that's one of the many things that I love about being a growth company in the Midwest, because I think that the Midwest capital industry tends to be a little bit more holistic in their approach to their diligence about companies. But there's still this idea that once you hit a certain level in terms of reputation, then whatever you do or whatever you say is taken at face value, and you can't really fail at that point, you can only fail upwards.

That was the Theranos story in a nutshell, is somehow they didn't ... People were willing to just dump insane amounts of money just based on the names of the people on the board and the names of the people and investors, and didn't even come close to doing any kind of diligence on what the actual thing did. I think you see that a lot, and in general, in terms of valuations of software companies, the formulas all talk about the revenue side of it. Very few of them have metrics to really determine whether this is a good company, and that goes back to the integrity thing. You know, you're missing some critical legs of the stool if you're only worried about the revenue side of things.

Wes Winham:I've heard that claim about, like in the indictment of the venture capital industry specifically. I think it says something about the people that did invest, but I went back and looked and they had one ... Their seed round they had a proper venture capital investor, a smaller investor, but every subsequent round the traditional venture capital folks, like the smart money, passed on Theranos.David Odmark:Right. Now, that's true, and they still managed to build a tremendous valuation. I guess one way to look at it is, just like your car is worth zero until you sell it, or your house is worth zero until you sell it, software valuations of course are, they're great to talk about but until you've had that sort of event, you don't really know what it is.

Just in terms of their operating capital, they had lots of reserves. It's contrasted with, say, the way Greenlight's trying to do it, trying to be both a good and a valuable company and not going straight for the huge fundraising, but instead try to fuel our growth organically and invest our real income, not just our paper based value, our revenue back into the company.

Wes Winham:Well, if that changes and you want an introduction to Henry Kissinger, just let me know. We can go all out.

David Odmark:Maybe pick a different example, I don't know.

Wes Winham:Maybe.

Wes Winham:So there's a tension that I think has been building as there's been generational turnover in the market, and there's kind of a, I think a tendency towards more transactional view between employee-employer relationship. What do you think about that, 100% transactional view?

David Odmark:Well yeah, I see a lot of that lately. It seems like there's a lot of sort of think pieces or articles and stuff aimed at Generation Z and even millennials talking about, you shouldn't live to work, you should work to live. They talk about work-life balance, but when you get down to particulars, what they really are talking about is work-life separation. The idea is that ... Another way to put it is, when I was growing up the accepted sort of chestnut wisdom was, find a way to get paid for doing something you love and you'll never work a day in your life. That seems to have shifted a little bit to, don't get paid for doing what you love because then you'll just end up hating it. But the idea is somehow that you need in your mind to compartmentalize your work from your non-work.

Even the terms work-life separation kind of scare me a little bit, because I mean, let's face it. We work 8, 10, 12 hours a day. We spend a significant portion of our waking hours at work.

Wes Winham:Absolutely.David Odmark:If you're going to mentally be compartmentalizing so that you're not considering that your life, then literally what you're doing is you are deferring huge portions of your life, and life's too short and valuable to not be living when you're at work. I really do think that this is a significant mindset, like if you walk into work and immediately start to push back and try to kind of protect yourself by disengaging from the mission of what your company's trying to do or the mission of what you need to do, you end up basically just biding time until you're not here anymore. And that, to me just seems like a, it's a shame, it's not a good way to live. I think that you do that and you end up, when you're retirement age, realizing that a massive part of your life was not part that you even consider having been lived.

So, I think a better way to look at it is more of a harmonization, and I'm certainly not saying that you need to turn your life over to your employer or anything like that, but rather, a lot of this goes into making sure that you end up working for companies who view you as more than just a resource to be exploited. And really, the way we address that is, we built our entire culture on a certain set of foundational concepts, one of which is we call vulnerability-based trust. That is to be contrasted with transactional-based trust. A transactional-based trust is contract-based. Think of blockchain, blockchain is the epitome of trust because it's technologically guaranteed, and that's cool. But in terms of human relationships, to me, it's one type but it's not the most interesting and effective, and frankly, at the end of the day, gratifying.

I think that people working together, combining their talents, and putting their trust in each other and being willing to be vulnerable, being willing to make assumptions and to make commitments beyond just these stated, enumerated, contractually guaranteed is what allows good individuals to become phenomenal teams and to truly achieve things that the collection just of the mere individuals can't possibly accomplish. Again, it kind of all goes back to this idea of you want to ... If you feel like me, and if this is kind of how you're oriented, make sure that you find a company that is trustworthy and that you can be a little vulnerable with. Otherwise, I think there's just ... It's not bad, it's just that there's ceilings on how much you can achieve.

Wes Winham:So one thing, earlier in my career, I had a new team member, he came from an environment where trust was not rewarded. His old manager had used some things he confided in him against him and [inaudible 00:23:51] had a history of doing that with other folks, so they kind of shut down. What are things we can do as team leaders for folks who are coming from that environment, to help them work through that trauma and kind of see it a different way?David Odmark:Right. I think the first thing is to, as leaders, make sure that you're not afraid to be vulnerable yourself. Some people have a kind of a mindset that as a leader, you can't show weakness, you have to prove yourself to be an expert on everything.

Wes Winham:I'm always right, I know everything.

David Odmark:Exactly. And the fear is that if you don't, then they won't respect you. I think in the kind of culture that I'm describing, it works better if the leaders surround themselves with people at least as smart, if not smarter than them, and aren't afraid to show it.

One of my mentors gave me a great little sheet that was basically, the concede was the difference between a boss and a leader. A lot of it went into things like that, like a boss is terrified to show weakness, a leader is willing to be vulnerable. A boss tries to take the credit for himself, a leader defers credit even if it's not 100% warranted. So in terms of the question ... And yeah, we've worked with people here at Greenlight who, coming into it, find that's probably the hardest thing they found about Greenlight is that they're not used to working in that kind of a trust-based environment.

The best way to do that is just for all of us to live our values and do it with integrity. Like if I talked the talk, but then turned around and wasn't willing to hold myself accountable for behaving in the same way, I wouldn't deserve the trust that I'm asking people to give. One example at Greenlight that's a good illustrative example, and it kind of goes back to that whole Generation Z tendency not to want to trust their employer, we have an unlimited PTO plan at Greenlight. Of course it's not really unlimited, obviously it's not cool if someone wants to work one day and not work six-

Wes Winham:I'll see you in ten years.

David Odmark:Yeah. But it's also not like a hippied uppy peace, love, and happiness type of thing. In fact, if you have difficulties trusting, it's easy to kind of think that it's a trap that's being laid. Studies have shown that companies with unlimited PTO, typically people will take less PTO. If you think that that's why we're doing it, and nothing we say or do can convince you otherwise, yeah, your natural tendency is going to be to be standoffish. On the other hand, we have to then demonstrate to our employees that yes we care, yes we want them to take PTO. As managers and leaders, we monitor PTO, and not to see who's taking too much, but to see who's taking too little, and say, "Hey, we noticed you've only taken a week. Is this cool? Are you doing this because you feel like you can't?"

David Odmark:The neat thing is that when it works really well, it [inaudible 00:26:56] this idea that we want people to take time off, but we also want them to think of the implications. Like if we have a massive mission critical piece, it's not like you can't take time off during that, but just think about ways to mitigate what we'd be missing. Give us advance time. Don't come to me on a Friday and say, "Oh yeah, I'm taking next week off." That's obviously not, kind of letting your team mates down. At the same time, we would be showing enormous bad faith if we said, "You've taken two weeks. That's kind of a lot, maybe you want to rethink that."

David Odmark:So it forces us into dealing with each other as professionals and grown-ups rather than just consulting a list of enumerated entitlements. Which, if you get good at that, again, you build that kind of trust, that's when the team really starts to take off.

Wes Winham:You've done a great job of diving into management tactics that can help increase trust between employers and employees. Another thing we hear regularly from candidates who are switching jobs is they're looking for more career advancement opportunities. That could range from getting an advanced degree to working on specific types of projects, technology. How have you built those sorts of structural pieces, career ladders, into your team's culture at Greenlight to retain top talent, top folks?

David Odmark:One of the tenets of that is that not everybody is motivated or wants the same types of thing. So if you are the kind of person that needs that kind of structural back stock, and there's plenty of good, legitimate reasons why, then at some level, probably working for a company, a smaller growth company like Greenlight that doesn't necessarily have the structural advantages that a bigger company has, like enough spare revenue lying around to do a full, massive, generous tuition reimbursement campaign or whatever ... Or if we're putting so much investment back into the company, then obviously profit sharing is challenging. Things of that nature, so I mean, my first answer is maybe a company like Greenlight just literally can't give some people what they want, if that's what they want.

But there are definitely some things that companies like us can do from a structural perspective, so we do have ... And I also don't want to give the impression that Greenlight has no policy, like policy is anathema to us, because I mean, that would be a pretty funny situation given the business that we're in, which is all about policies and procedures and quality and all of that. We actually are very much of a process-driven company and strive to improve upon that every day. It's just that a lot of the processes themselves have kind of negotiating room.

So for example, we do have a policy for professional development, but it's not, "you're entitled to X credit hours of classes," it's we ask that you put together a proposal and then that proposal is discussed with your manager and then it's discussed at the executive level, and if you've made a really good compelling case, not just that it's good professional development, but that there's some ROI, then as long as it's not so excessive that it would make a big dent in our fiscal position, then we'll do it.

And we've luckily built up our history the last four years of saying yes a lot more than we've said now, so that there are actual results to point to and say, "we're not going to guarantee that every request is going to be granted, but we have a good history of saying yes when it makes a lot of sense." The other part of that policy is that we expect that people will find a way to share the results. If it's a matter of, like sending a guy to Java One, which for a company our size is a pretty big commitment for our company.

Wes Winham:Mm-hmm (affirmative), that is not a cheap conference.

David Odmark:[crosstalk 00:32:03] plus everyone here is just incredibly important to what we're trying to do, so just losing a developer for a week isn't easy. But obviously, the ROI is, needless to say, very compelling too, so we ask that, when they come back to put together a little lunch and learn or a presentation. Share what you learned, don't just keep it to yourself, but pump it back into the team.

These are our policies, so they're very much structural, but the policy doesn't dictate exactly what has to happen, it just creates parameters around the way that the conversation should go. Is that, did I answer your question? I think that's the way that we've found, and it's taken a while to get to this point. I mean, when you're a start-up, you kind of do everything off the cuff and it's really hard to establish the kind of vulnerability-based trust culture when you're sort of making it all up as you go along. So building a history of walking the walk really helps in that regard, too.

There are a lot of companies, especially companies of size, that almost can't help but look at their employees as resources to be exploited. I mean, that's one of the things that's endlessly fascinating to me, it's one of the reasons why I really wanted to co-found a company. I've been involved in lots of start-ups in my career, but this is really the first opportunity as a co-founder to really kind of put my stamp on it from the ground up in terms of what I believe. And luckily all of us are pretty simpatico, so I'm not trying to take credit for our culture by any stretch. But it is endlessly fascinating to me how you can scale the cool things about the start-up culture, the small culture, as you get to a 50 person company, as you get to 150, as you get to a 15,000 person company.

I mean, I have some ideas, but I won't know if they're legit until we actually get there. But a lot of ... Again, kind of going back to what I was saying about the valuable companies. If your management is only focused on being a valuable company and not on being a good company, then it's going to seem almost irresistible to start looking at your people as resources, as human resources. And just that term, human resources, makes me want to ... You know. They're people. And if you treat them like resources, then you better treat them like your printer and expect them to break down and have to replace them fairly regularly. At a company like us, where what we're trying to do, and we're trying to do something really hard without a massive surplus of resources to do it, it literally wouldn't work. So some of this is born by just a passion and my belief that this is the right way to do it, but some of it is purely pragmatic. I think it's the only way to be successful starting something from four dudes energetically hacking away in a garage to something really big and really significant.

Wes Winham:My guest today has been David Odmark. David, thank you for joining us today on Scaling Software Teams.